Dynamic capabilities and intergenerational growth in the family business: the role played by director rotation

Director rotation mechanism can effectively solve the problem of control of family business and enhance dynamic capabilities. This paper selects the case of TaiLi, which lasted for nearly 40 years, as the object of study, and develops the theoretical basis for the alternation between turn-taking mechanism and inter-family business. The research shows that the rotation mechanism facilitates a peaceful corporate climate for family businesses, where managers can expand, share, transfer and innovate knowledge through rotation. The family business upgrades the mechanism of turning around and continuously enhances a series of dynamic capacities such as internal learning ability, resource integration ability and environmental adaptation ability, achieves intergenerational growth of family-owned businesses through the continuous emergence of heterogeneous resources. This paper establishes an analytical paradigm of turning around family business and enterprise dynamic capabilities, which can provide practical implications for the sustainable and healthy development of family businesses and managers' knowledge innovation.